On Sunday we anticipated that Microsoft would start talking more about Windows Phone 7.8 as all signs point to January 31st as the beginning of a global rollout for current Windows Phone users.

Today, Microsoft has announced the Windows Phone 7.8 SDK update, which will allow developers to better target the 7.8 changes—specifically new Tile options—and to make sure that the apps behave as intended.

Detailing the update on the Windows Phone Developer blog, Microsoft’s Cliff Simpkins explains why devs will want to download this and get their apps updated as soon as possible.

The main new features for Live Tiles are the following for 7.8:

The app’s primary tile can have a customized small tile, support wide tiles, and also take advantage of the Flip tile template.

Secondary tiles can be enabled to take advantage of all three of the new tile templates (Flip, Iconic, and Cycle).

Apps updated for 7.8 will of course still run just fine on Windows Phone 7.x, meaning this won’t “lock out” users, it simply adds more features much like how Mango added new options when it was released.

The bad news is this SDK does not add any new APIs to 7.8. That means outside of some tile behavior we don’t expect to see lockscreen support besides the official Bing image-of-the-day, which is native to the system.

With the news of the SDK coming out, we’re quite confident now that the 7.8 OS update is right around the corner. Though it may take a few weeks or even months for individual carriers to sign off on the update, at least the process will have begun.

Mah, I've given up hope on that update... I've given up hope on upgrading to WP8 either because it's too expensive in my country, even with all the "deals" carriers are offering... I'm stuck with my almost-dead-wifi-is-useless-and-slow Omnia 7 (with or without 7.8) indefinitely, as it seems... :(

Just buy it outright on eBay? I saved $250 on the retail price of my mobile (it was $768) 1 week after it was released. Going prepaid too means I'm not locked into a contract and save another $800 over 2 years (compared to the cheapest contract). Just make sure the mobile supports your carriers frequencies (easier if you're not in the US) and you're good to go.

Am I correct in saying that if a DEV does not update their app to support the new 7.8 live tiles and new sizes, the update is almost useless in the end? Or will any current app allow me to resize the tile, but some of the possible "live" features may not work?

Most first party apps take advantage of the double wide tiles. Third party apps of course can take advantage of them but they don't have to. Either way you can use the small and medium tile, the double wide is the one that requires extra work. ;)

The way I understand it, the resizing if the tile is simply like attaching a website to a tile on your start screen- kinda like a snapshot getting cropped. But yeah, live tiles need to be optimized to work correctly.

7.5 apps can take advantage of the small tile size without doing anything - it simply shrinks the standard/medium tile (much like running a 7.5 app on a 8.0 device).

From a dev PoV, this SDK update allows you to tailor your tile experience to (a) provide a more polished/custom small tile, (b) add support for wide tiles, and (c) use the three new tile templates on your secondary tiles.
From a consumer PoV, the 7.8 update should be about the same as getting a 8.0 device running 7.5 apps...so I'd venture to say it's very far from a "useless" update.

I am perfectly fine with the update only including the new tile sizes and nothing else but I would have loved to see lock screen support as an added "bone" of sorts... Ah well... As I said, I'm pleased as it is.

As far as I can tell the Facebook app is the only third party app that takes advantage of the double wide tile for now. TVShow by Rudy Huyn is getting updated to support 7.8 in the next couple of days.

I don't know of any other app for now. Let's hope everyone updates to 7.8 sooner rather than later.